Counting tips as minimum wage to be banned

The ban on using tips to top up workers’ pay so that it meets the national minimum wage (NMW) will come into force in October, the government has announced.

In July last year, the government revealed it was planning to amend the regulations to mark the 10th anniversary of the NMW legislation.

Today’s announcement forms the government’s response to a consultation on the use of tips, gratuities, service charges and cover charges to pay staff the NMW.

Employment relations minister Pat McFadden said: “We do not believe employers should be able to use tips meant as a bonus for staff to boost pay levels to the legal minimum.

“Our consultation showed wide support for these changes, including from business groups, and we are working with them to ensure that consumers get the information they need.”

The British Hospitality Association, however, urged the government to delay the move because of the recession, warning 45,000 jobs could be at risk if the law changed as employers could not afford to top up wages.

Derek Simpson, Unite joint general secretary, welcomed the move. But he added: “There remains a need for a fully transparent tipping system where 100% of tips go to staff. Unite is unconvinced that the voluntary code of practice announced today will give consumers the clarity they need to be confident that any money they leave will go to the employees who deserve it.”

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